SUBORDINATED SECURITY AGREEMENT
Dated as of July 1, 1996
among
OLD DOMINION ELECTRIC COOPERATIVE,
EPC CORPORATION,
AMBAC INDEMNITY CORPORATION
and
CLOVER XXXX 0 XXXXXXXXXX XXXXX
XXXXXX XXXX 0 GENERATING FACILITY
AND
COMMON FACILITIES
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS................................................................................... 5
SECTION 2. DISTRIBUTION OF PROCEEDS FROM SALE OF SUBORDINATED
COLLATERAL.................................................................................... 5
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF OLD
DOMINION; EVENTS OF DEFAULT; REMEDIES......................................................... 5
SECTION 3.1. SUBORDINATED SECURITY AGREEMENT EVENT OF DEFAULT....................... 5
SECTION 3.2. OTHER RIGHTS OF SUBORDINATED SECURED PARTIES........................... 5
SECTION 3.3. DELAY OR OMISSION NOT A WAIVER......................................... 6
SECTION 3.4. RESTORATION OF RIGHTS AND REMEDIES..................................... 7
SECTION 4. ATTORNEY-IN-FACT; FINANCING STATEMENTS; CONTROL OF
REMEDIES...................................................................................... 7
SECTION 4.1. SUBORDINATED SECURED PARTIES AS ATTORNEY-IN-FACT....................... 7
SECTION 4.2. CONTROL OF REMEDIES.................................................... 7
SECTION 5. CONDITION PRECEDENT TO REMEDIES............................................................... 8
SECTION 6. MODIFICATION OF SENIOR DOCUMENTS AND RIGHTS................................................... 8
SECTION 7. MISCELLANEOUS................................................................................. 8
SECTION 7.1. TERMINATION OF AGREEMENT; RELEASE OF COMPONENTS........................ 8
SECTION 7.2. NO LEGAL TITLE TO SUBORDINATED COLLATERAL IN
SUBORDINATED SECURED PARTIES.................................................................. 9
SECTION 7.3. NOTICES................................................................ 9
SECTION 7.4. SURVIVAL............................................................... 10
SECTION 7.5. SUCCESSORS AND ASSIGNS................................................. 10
SECTION 7.6. BUSINESS DAY........................................................... 11
SECTION 7.7. GOVERNING LAW.......................................................... 11
SECTION 7.8. SEVERABILITY........................................................... 11
SECTION 7.9. COUNTERPARTS........................................................... 11
SECTION 7.10. HEADINGS AND TABLE OF CONTENTS......................................... 11
SECTION 7.11. FURTHER ASSURANCES..................................................... 11
SECTION 7.12. NO ORAL MODIFICATIONS OR CONTINUING WAIVERS............................ 11
SECTION 7.13. LIMITATION OF LIABILITY................................................ 12
SECTION 7.14. SPECIAL SUBSTITUTION OF SUBORDINATED COLLATERAL........................ 12
SECTION 7.15. EFFECTIVENESS OF THIS AGREEMENT........................................ 12
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SUBORDINATED SECURITY AGREEMENT
This SUBORDINATED SECURITY AGREEMENT, dated as of July 1, 1996
(this "Subordinated Security Agreement" or this "Agreement"), among OLD DOMINION
ELECTRIC COOPERATIVE, a wholesale power supply cooperative organized and
existing under the laws of the Commonwealth of Virginia ("Old Dominion"), EPC
CORPORATION, a Delaware corporation (the "Owner Participant"), AMBAC INDEMNITY
CORPORATION, a Wisconsin-domiciled stock insurance corporation ("AMBAC"), and
CLOVER XXXX 0 XXXXXXXXXX XXXXX, a Delaware business trust created pursuant to
the Trust Agreement (as defined pursuant to Section 1) (the "Facility Owner").
WHEREAS, the Clover Real Estate is more particularly described in
Schedule 1 to the Ground Lease and Sublease and is comprised of the Unit 1 Site
described in Schedule 2 thereto, the Unit 2 Site described in Schedule 3
thereto, the Common Facilities Site described in Schedule 4 thereto, and certain
other property, each such Schedule 1, Schedule 2, Schedule 3, and Schedule 4
being attached to, and recorded in the Halifax Clerk's Office with, the Ground
Lease and Sublease as part thereof;
WHEREAS, a copy of the Clover Power Station Plat is marked Exhibit A
and attached to, and recorded in the Halifax Clerk's Office with, the Ground
Lease and Sublease as a part thereof;
WHEREAS, Old Dominion and Virginia Power own the Clover Real Estate as
tenants-in-common;
WHEREAS, by the Clover Agreements, Old Dominion and Virginia Power
established their respective rights and obligations as tenants-in-common of the
Clover Real Estate and of all improvements thereafter to be constructed, and all
personal property thereafter to be situated, on the Clover Real Estate. Such
improvements and personal property held by Old Dominion and Virginia Power as
tenants-in-common include (a) the Unit 1 Foundation constructed on the Xxxx 0
Xxxx, (x) the Xxxx 0 Foundation constructed on the Unit 2 Site, (c) the Common
Facilities Foundation constructed on the Common Facilities Site, (d) the Unit 1
Equipment situated on the Unit 1 Site, (e) the Xxxx 0 Equipment situated on the
Unit 2 Site, and (f) the Common Facilities Equipment situated on the Common
Facilities Site;
WHEREAS, as tenants-in-common of such real and personal property, each
of Old Dominion and Virginia Power holds a 50% undivided interest in such real
and personal property, including the right to nonexclusive possession of all
such real and personal property, subject to (a) in the case of all such real and
personal property, the rights of the other to nonexclusive possession and the
terms and conditions of the Clover Agreements, (b) in the case of the Pollution
Control Assets, the rights, terms and conditions described above in clause (a)
and the rights of the Pollution Control Assets Lessor, and (c) in the case of
the Common Facilities, the Unit 1 Site, the Unit 1 Foundation and the Unit 1
Equipment, the rights, terms and conditions described above in clause (a) and
the rights of the Unit 1 Parties;
WHEREAS, by the Ground Lease and Sublease, Old Dominion has leased the
Ground Interest to the Facility Owner, and the Facility Owner simultaneously has
subleased the Ground Interest back to Old Dominion, upon the terms and
conditions of the Ground Lease and Sublease;
WHEREAS, Old Dominion has conveyed to the Facility Owner for a term of
years (a) the Foundation Interest by the Head Foundation Agreement and (b) the
Equipment Interest by the Head Equipment Agreement;
WHEREAS, by the Operating Foundation Agreement, the Facility Owner has
conveyed the use and possession of the Foundation Interest back to Old Dominion
upon a term which shall end prior to the expiration of the term of the Head
Foundation Agreement;
WHEREAS, by the Operating Equipment Agreement, the Facility Owner has
conveyed the use and possession of the Equipment Interest back to Old Dominion
upon a term which shall end prior to the expiration of the term of the Head
Equipment Agreement, with the Head Equipment Agreement and the Operating
Equipment Agreement not being recorded;
WHEREAS, although Old Dominion and the Facility Owner intend that the
Foundation Interest at all times and in all respects be and remain personal
property under Virginia law, they have recorded the Head Foundation Agreement
and the Operating Foundation Agreement in the Halifax Clerk's Office in order to
satisfy the conditions of Section 55-96 of the Code of Virginia 1950, as
amended, in the event that the Foundation Interest is deemed to be real estate
or an interest in real estate for purposes of such Section 55-96;
WHEREAS, the Unit 1 Parties and the Unit 2 Parties shall share equally
all of those rights, and shall be subject equally to having all of those
responsibilities undertaken, which granted to or are imposed upon Old Dominion
with respect to the Common Facilities Site, the Common Facilities Foundation and
the Common Facilities Equipment, as (a) tenant-in-common with Virginia Power of
such property and (b) a party to the Clover Agreements;
WHEREAS, by the Old Dominion Indenture, as amended and supplemented
from time to time, Old Dominion granted to Crestar Bank, as Trustee, a Lien on
and security interest in, among other things, all of Old Dominion's rights,
title and interest in, to and under the Clover Real Estate and Clover Unit 2;
WHEREAS, Old Dominion, the Owner Participant, the Facility Owner,
Wilmington Trust Company (in the capacities specified therein) and
Utrecht-America have entered into the Participation Agreement, dated as of July
1, 1996 (the "Participation Agreement");
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WHEREAS, pursuant to the Participation Agreement, Old Dominion has
obtained from AMBAC the Surety Bond to support its Covered Obligations;
WHEREAS, pursuant to the AMBAC Guaranty, Old Dominion has agreed to
reimburse AMBAC for any payments made under the Surety Bond;
WHEREAS, Old Dominion has agreed to secure on a subordinated basis the
Covered Obligations by this Subordinated Security Agreement as provided below;
and
WHEREAS, simultaneously with the execution and delivery of this
Subordinated Security Agreement, Old Dominion has executed and delivered the
Subordinated Mortgage to the Subordinated Trustees to further secure the Covered
Obligations.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
GRANTING CLAUSE
To secure (a) Old Dominion's obligations to pay the Covered
Obligations to the extent and only to the extent (x) AMBAC is obligated to pay
such Covered Obligations under the Surety Bond, (y) a timely Demand for Payment
is made in accordance with the terms of the Surety Bond, and (z) AMBAC shall
have failed to honor such Demand for Payment, and (b) Old Dominion's obligations
under the AMBAC Guaranty (items (a) and (b) collectively referred to hereinafter
as the "Secured Obligations"), Old Dominion hereby pledges and mortgages unto
AMBAC, the Owner Participant and the Facility Owner (collectively, the
"Subordinated Secured Parties") all rights, title and interests of Old Dominion
in, to and under, and grants to the Subordinated Secured Parties a security
interest in, the following described property, rights and privileges
(collectively, the "Subordinated Collateral"):
1. its 50% undivided interest as tenant in common with Virginia
Power in the Unit 2 Equipment other than Pollution Control Assets;
2. its leasehold interest as lessee under the Pollution Control
Assets Lease in the Pollution Control Assets comprising a part of the Unit 2
Equipment;
3. its 50% undivided interest as tenant in common with Virginia
Power in the Unit 2 Foundation;
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4. all proceeds of paragraphs 1, 2 and 3, above, of whatever kind
or nature including, without limitation, all claims against third parties for
destruction, loss or damage to any of the foregoing or otherwise.
PROVIDED, HOWEVER, the foregoing pledge and mortgage is, in all
respects, subject, subordinate and inferior in priority, to the following:
1. the Lien of the Old Dominion Indenture (including any
amendment, supplement, future advance or issuance of additional indebtedness
thereunder);
2. any indenture, mortgage, deed of trust or similar instrument
given as substitution or replacement of the Old Dominion Indenture;
3. the Lien of Permitted Encumbrances;
4. the Lien of the Leasehold Mortgage (including any amendment,
supplement, substitution or replacement thereto);
5. the Clover Agreements (including any amendment, supplement,
substitution or replacement thereto) and the rights of the parties thereto;
6. the Clover 1 Documents (including any amendment, supplement,
substitution or replacement thereto) and the rights of the parties thereto
(including, without limitation the respective rights of the parties to quiet
enjoyment thereunder);
7. other than the Subordinated Mortgage, the other Operative
Documents (including any amendment, supplement, substitution or replacement
thereto) and the rights of the parties thereto (including, without limitation
the respective rights of the parties to quiet enjoyment thereunder); and
8. the Pollution Control Assets Lease Documents (including any
amendment, supplement, substitution or replacement thereto) and the rights of
the parties thereto (including, without limitation the respective rights of the
parties to quiet enjoyment thereunder).
The foregoing items 1-8 hereinafter collectively referred to as the "Senior
Documents and Rights."
TO HAVE AND TO HOLD the Subordinated Collateral unto the
Subordinated Secured Parties for the uses and purposes and subject to the terms
and provisions set forth in this Agreement, to remain in full force and effect
until terminated as provided in Section 7.1.
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IT IS HEREBY FURTHER COVENANTED AND AGREED by and among the
parties hereto as follows:
SECTION 1. DEFINITIONS
For purposes of this Agreement, capitalized terms used and not
otherwise defined herein shall have the meanings assigned to them in Appendix A
to the Participation Agreement.
SECTION 2. DISTRIBUTION OF PROCEEDS FROM SALE OF SUBORDINATED
COLLATERAL
Any amounts received in respect of a sale of any of the Subordinated
Collateral after a Subordinated Event of Default shall have occurred and be
continuing shall be applied or distributed ratably among AMBAC, the Facility
Owner and the Owner Participant according to the Covered Obligations held by
each.
Upon payment in full of the Covered Obligations, the balance, if any,
of such amounts remaining shall be distributed to Old Dominion.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF OLD
DOMINION; EVENTS OF DEFAULT; REMEDIES
SECTION 3.1. SUBORDINATED SECURITY AGREEMENT EVENT OF DEFAULT.
The term "Subordinated Security Agreement Event of Default," wherever used
herein, shall mean a default in the payment of any of the Secured Obligations
when and as the same shall become due and payable, which default shall continue
unremedied for more than five days.
SECTION 3.2. OTHER RIGHTS OF SUBORDINATED SECURED PARTIES. Old
Dominion agrees that when any Subordinated Security Agreement Event of Default
has occurred and is continuing, the Subordinated Secured Parties may, subject to
the provisions of Section 3.4, Section 4 and only upon satisfaction of the
conditions precedent described in Section 5 hereof, without limitation of all
other rights and remedies available at law or in equity in such event, exercise
any one or more or all, and in any order, of the following remedies, it being
expressly understood that no remedy herein conferred is intended to be exclusive
of any other remedy or remedies, but that each and every remedy is cumulative
and is in addition to every other remedy given herein or now or hereafter
existing at law or in equity or by statute:
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(a) directly, or by agents or attorneys, and subject to
compliance with Applicable Law, to take possession of all or any part
of the Subordinated Collateral, and having and holding the same to use,
operate, manage and control the Subordinated Collateral and to conduct
the business thereof and collect and receive all earnings,
revenues, rents, issues, proceeds and income of the Subordinated
Collateral and every part thereof, all for the sole purpose of
providing for the payment of amounts secured hereunder and, for such
purpose, to maintain, repair and renew the Subordinated Collateral and
make replacements, alterations, additions and improvements thereto and
remove and dispose of any portion of the Subordinated Collateral and
otherwise to exercise any and all of the rights and powers of Old
Dominion in respect thereof;
(b) proceed to exercise all rights, privileges and remedies of
Old Dominion under the Head Equipment Agreement and the Head Foundation
Agreement either in the name of the Subordinated Secured Parties or in
the name of Old Dominion for the use and benefit of the Subordinated
Secured Parties;
(c) if at the time such action is lawful and always subject to
compliance with Applicable Law, either with or without taking
possession, and either before or after taking possession, and without
instituting any legal proceedings whatsoever, sell and dispose of the
Subordinated Collateral, or any part thereof, or interest therein, at
any private sale or public auction to the highest bidder, with or
without demand, advertisement or notice (except as herein required or
as may be required by Applicable Law) of the date, time and place of
sale and either for cash or on credit and on such terms as the
Subordinated Secured Parties may determine. It is agreed that thirty
days' notice to the Owner Participant, the Owner Trustee and Old
Dominion of the date, time and place (and terms, in the case of a
private sale) of any proposed sale by the Subordinated Secured Parties
of the Subordinated Collateral or any part thereof or interest therein
is reasonable. Any such sale or sales may be adjourned from time to
time by announcement at the time and place appointed for such sale or
sales, or for any such adjourned sale or sales, without further notice,
and the Owner Participant, the Owner Trustee, Old Dominion and/or AMBAC
may bid and become the purchaser at any such sale; and
(d) proceed to protect and enforce this Agreement and the
Secured Obligations held by it by suit or suits or proceedings in
equity, at law or in bankruptcy, and for the specific performance of
any covenant or agreement herein or therein contained or in execution
or aid of any power herein granted, or for foreclosure hereunder or
thereunder, or for the appointment of a receiver or receivers for the
Subordinated Collateral or any part thereof, or for the recovery of
judgment for the Secured Obligations or for the enforcement of any
other proper, legal or equitable remedy available under Applicable Law.
SECTION 3.3. DELAY OR OMISSION NOT A WAIVER. No delay or
omission by the Subordinated Secured Parties in the exercise of any right or
remedy accruing upon any Subordinated Security Agreement
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Event of Default will impair any such right or remedy or constitute a
waiver of any Subordinated Security Agreement Event of Default or be deemed to
be an acquiescence therein. Every right and remedy given by this Section 3 or by
law to the Subordinated Secured Parties may be exercised from time to time, and
as often as may be deemed expedient, by the Subordinated Secured Parties.
SECTION 3.4. RESTORATION OF RIGHTS AND REMEDIES. If the
Subordinated Secured Parties have instituted any proceeding to enforce any
right, power or remedy under this Agreement and such proceeding has been
discontinued or abandoned or for any reason has been determined adverse to the
Subordinated Secured Parties, then the Owner Trustee and Old Dominion shall,
subject to any determination in such proceeding, be restored to their former
positions hereunder and all rights, remedies and powers of the Subordinated
Secured Parties shall continue as if no such proceeding has been instituted.
SECTION 4. ATTORNEY-IN-FACT; FINANCING STATEMENTS; CONTROL OF
REMEDIES
SECTION 4.1. SUBORDINATED SECURED PARTIES AS ATTORNEY-IN-FACT.
Old Dominion hereby appoints and constitutes, subject to Section 4.2 hereof, the
Subordinated Secured Parties as the true and lawful attorney-in-fact of Old
Dominion for the purpose of taking any action permitted by this Agreement in
connection with the enforcement of the Lien of this Agreement, with full power
(in the name of Old Dominion or otherwise), at any time following a Subordinated
Security Agreement Event of Default and during the continuance thereof, to ask,
require, demand and receive any and all amounts and claims for amounts due and
to become due under or arising out of the Operative Documents (to the extent
that such moneys and claims constitute part of the Subordinated Collateral), to
endorse any check or other instrument or order in connection therewith and to
file any claim or take any action or institute any proceeding to collect any
portion of the Subordinated Collateral. Upon the written instructions of the
Subordinated Secured Parties, Old Dominion shall execute any financing statement
(and any continuation statement with respect to any such financing statement),
or any other document necessary for the Subordinated Secured Parties to obtain
the full benefits of the Lien of this Agreement and as may be specified in such
instructions.
SECTION 4.2. CONTROL OF REMEDIES. Notwithstanding anything
else contained in this Agreement, upon the occurrence and during the continuance
of a Subordinated Security Agreement Event of Default, AMBAC shall be entitled
to control and direct the enforcement of all rights and remedies granted to the
Subordinated Secured Parties for the benefit of all Subordinated Secured
Parties; PROVIDED, HOWEVER, that if (a) a Covered Obligation is covered under
the Surety Bond and (b) AMBAC fails to pay when due a claim made under the
Surety Bond, the Facility Owner and the Owner Participant shall have the right
to appoint a party to control and direct the enforcement of all rights and
remedies under this Agreement.
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SECTION 5. CONDITION PRECEDENT TO REMEDIES
Until (i) all Subordinated Collateral is released from the
Liens of the Old Dominion Indenture and (ii) all obligations under the Operating
Agreements are paid or discharged in full and the Operating Agreements are
terminated and the Liens of the Loan Agreement and the Leasehold Mortgage have
been discharged, the Subordinated Secured Parties shall not (x) exercise any
rights or enforce any remedies or assert any claim with respect to the
Subordinated Collateral and Subordinated Real Property granted to the
Subordinated Secured Parties under this Agreement or the Subordinated Mortgage,
(y) seek to foreclose the Liens granted pursuant to this Agreement or the
Subordinated Mortgage or sell the Subordinated Collateral, or (z) take any
action, directly or indirectly, or institute any proceedings, directly or
indirectly, with respect to any of the foregoing.
SECTION 6. MODIFICATION OF SENIOR DOCUMENTS AND RIGHTS
Subject to the provisions of the Operative Documents, Old
Dominion and the other parties to the Senior Documents and Rights may, without
affecting in any manner the subordination of the Covered Obligations to the
Senior Document and Rights at any time or from time to time and in their
absolute discretion, change the manner, place or terms of payment of amounts due
under the Senior Documents and Rights, or amend in any way the Senior Documents
and Rights to which they are a party, or exercise or refrain from exercising any
other of their rights pursuant thereto, all without notice to or consent of the
Subordinated Secured Parties.
SECTION 7. MISCELLANEOUS
SECTION 7.1. TERMINATION OF AGREEMENT; RELEASE OF COMPONENTS.
(a) Upon payment in full by Old Dominion of all amounts then due and payable
under the AMBAC Guaranty and the termination of the AMBAC Guaranty in accordance
with its terms, this Agreement will terminate and the Liens created by this
Agreement upon the Subordinated Collateral and Subordinated Real Property will
be released. Upon such termination and release, the Subordinated Secured Parties
shall (i) promptly deliver to Old Dominion a written notice stating that the
Liens created by this Agreement have been discharged pursuant to this Section
6.1 and (ii) execute and deliver to, or as directed in writing by, Old Dominion,
an instrument in form and substance satisfactory to Old Dominion evidencing the
termination of this Agreement and the release of the Subordinated Collateral
from the Liens created by this Agreement.
(b) All Components that no longer constitute part of the
Equipment Interest or the Foundation Interest in accordance with Section 7.2 of
the Operating Equipment Agreement or Section 7.2 of the Operating Foundation
Agreement, respectively, shall be automatically released from
8
the Lien of this Agreement. The Subordinated Secured Parties, if requested by
Old Dominion, shall execute and deliver such instruments in form and
substance satisfactory to Old Dominion evidencing such release.
SECTION 7.2. NO LEGAL TITLE TO SUBORDINATED COLLATERAL IN
SUBORDINATED SECURED PARTIES. (a) The Subordinated Secured Parties shall not,
except as may result from its exercise of remedies hereunder, have legal title
to any part of the Subordinated Collateral. No transfer, by operation of law or
otherwise, of any Secured Obligations or other right, title and interest of the
Subordinated Secured Parties in and to the Subordinated Collateral or hereunder
shall operate to terminate this Agreement or entitle the Subordinated Secured
Parties to an accounting or to the transfer to it of any legal title to any part
of the Subordinated Collateral.
(b) Each Subordinated Secured Party shall have no further
interest in, or right with respect to, the Subordinated Collateral under this
Agreement when and if the principal and interest on all Secured Obligations held
by such Subordinated Secured Party and all sums payable to such Subordinated
Secured Party hereunder and under such Secured Obligations shall have been paid
in full.
SECTION 7.3. NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all communications and notices provided for
herein shall be in writing or by a telecommunications device capable of creating
a written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, without limitation, by overnight mail or courier
service, (b) in the case of notice by United States mail, certified or
registered, postage prepaid, return receipt requested, upon receipt thereof, or
(c) in the case of notice by such a telecommunications device, upon transmission
thereof, PROVIDED such transmission is promptly confirmed by either of the
methods set forth in clauses (a) or (b) above, in each case addressed to each
party hereto at its address set forth below or, in the case of any such party
hereto, at such other address as such party may from time to time designate by
written notice to the other parties hereto:
If to the Owner Participant:
EPC Corporation
c/o Chrysler Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: President
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If to AMBAC:
AMBAC Indemnity Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: General Counsel
If to Old Dominion:
Old Dominion Electric Cooperative
0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Vice President of Accounting and Finance
If to the Facility Owner:
Clover Unit 2 Generating Trust
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Corporate Trust Administration
SECTION 7.4. SURVIVAL. All warranties, representations,
indemnities and covenants made by any party hereto, herein or in any certificate
or other instrument delivered by any party or on the behalf of any party under
this Agreement shall be considered to have been relied upon by the other party
hereto and shall survive the consummation of the transactions contemplated
hereby on the Closing Date regardless of any investigation made by either party
or on behalf of either party.
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SECTION 7.5. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by, the
parties hereto and their respective successors and assigns as permitted by and
in accordance with the terms hereof. Except as expressly provided herein or
in the other Operative Documents, no party hereto may assign its interests
herein without the consent of the other parties hereto.
SECTION 7.6. BUSINESS DAY. Notwithstanding anything herein or
in any other Operative Document to the contrary, if the date on which any
payment is to be made pursuant to this Agreement or any other Operative Document
is not a Business Day, the payment otherwise payable on such date shall be
payable on the next succeeding Business Day with the same force and effect as if
made on such scheduled date and (PROVIDED such payment is made on such
succeeding Business Day) no interest shall accrue on the amount of such payment
from and after such scheduled date to the time of such payment on such next
succeeding Business Day.
SECTION 7.7. GOVERNING LAW. THIS AGREEMENT SHALL BE IN ALL
RESPECTS GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 7.8. SEVERABILITY. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under Applicable Law, but if any provision of this Agreement shall be
prohibited by or invalid under Applicable Law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
SECTION 7.9. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one Agreement.
SECTION 7.10. HEADINGS AND TABLE OF CONTENTS. The headings of
the sections of this Agreement and the Table of Contents are inserted for
purposes of convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
SECTION 7.11. FURTHER ASSURANCES. Each party hereto shall
promptly and duly execute and deliver such documents and provide such further
assurances for and take such further action reasonably requested by any party to
whom such first party is obligated, all as may be reasonably necessary to carry
out more effectively the intent and purpose of this Agreement.
SECTION 7.12. NO ORAL MODIFICATIONS OR CONTINUING WAIVERS. No
term or provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party or
the Person against whom enforcement of the change, waiver, discharge or
termination is sought.
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SECTION 7.13. LIMITATION OF LIABILITY. It is expressly
understood and agreed by the parties hereto that (a) this Agreement is executed
and delivered by Wilmington Trust Company, not individually or personally but
solely as trustee of Clover Unit 2 Generating Trust (the "Trust") under the
Trust Agreement, in the exercise of the powers and authority conferred and
vested in it, (b) each of the representations, undertakings and agreements
herein made on the part of the Trust is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but is
made and intended for the purpose for binding only the Trust, (c) nothing herein
contained shall be construed as creating any liability on Wilmington Trust
Company, individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly waived by
the parties hereto or by any Person claiming by, through or under the parties
hereto and (d) under no circumstances shall Wilmington Trust Company be
personally liable for the payment of any indebtedness or expenses of the Trust
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Agreement or any
other Operative Documents.
SECTION 7.14. SPECIAL SUBSTITUTION OF SUBORDINATED COLLATERAL.
Old Dominion shall have the right to convey free and clear of the Lien created
by this Subordinated Security Agreement legal title to (or a leasehold interest
in) the Subordinated Collateral to a Person in a transaction characterized as a
sale (or lease) and leaseback, or similar transaction ("Permitted Transaction")
for United States commercial law purposes; provided, however, Old Dominion shall
subject and subordinate to the Senior Documents and Rights, grant to the
Subordinated Secured Parties a security interest in the leaseback interest (or
similar interest) granted to Old Dominion in connection with the Permitted
Transaction.
SECTION 7.15. EFFECTIVENESS OF THIS AGREEMENT. This Agreement
has been dated as of the date first above written for convenience only. This
Agreement shall be effective on the date of execution and delivery by each of
the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this
Subordinated Security Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized, as of the day and year first
above written.
OLD DOMINION ELECTRIC COOPERATIVE
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Date: July 31, 1996
CLOVER UNIT 2 GENERATING TRUST
By:Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
under the Trust Agreement
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Date: July 31, 1996
AMBAC INDEMNITY CORPORATION
By: /s/ X.X. XXXXXXX
-------------------------------
Name: X.X. Xxxxxxx
Title: First Vice President
Date: July 31, 1996
EPC CORPORATION
By: /s/ XXXXXX X. XXXXXXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
Date: July 31, 1996
